Bloomberg Línea — Despite greater investor selectivity, the high-end office sector remains hot in Latin America, particularly in the markets of São Paulo, Bogotá, Mexico City, and Santiago.
According to a Cushman & Wakefield survey, location remains the key factor for securing high-rent tenants, though it must be accompanied by modern infrastructure and a range of services.
Against this backdrop, the region has been consolidating a shift toward quality—the so-called "flight-to-quality." This occurs when tenants seek buildings with high technical specifications and strategic locations.
"We do not see any markets in the region experiencing a slowdown in growth. We expect a continued pipeline of new inventory," said Matheus Cardoso, President of Cushman South America, in an interview.
Despite the current landscape, the executive states that the increase in high-end supply must be selective and planned, particularly in a high-interest-rate environment. “The demand exists, and even in the face of capital cost challenges—which affect each country differently—investment will continue.”
In this market, which translated into increased activity in the second quarter in Bogotá, Lima, and Santiago. In Brazil and Mexico, the landscape is characterized by more subdued growth and high interest rates, making both supply and demand more selective in
the São Paulo, Rio de Janeiro, and Mexico City markets. Meanwhile, in Buenos Aires, the recovery remains gradual.
The average rent for high-end (“Class A”) space in Latin America ended the first half of the year at US$ 22.58 per square meter per month, an increase of 8.4% compared to the same period last year. According to the survey, the trend was uneven: pricing power
was concentrated in markets with lower vacancy rates, where landlords negotiate under more favorable conditions, while the rest of the region advanced at a more cautious pace.
Mexico City (US$ 23.9), Buenos Aires (US$ 23.2), San José (US$ 21.8), Lima (US$ 16.5), and Rio de Janeiro (US$ 15.3) round out the ranking, in that order, Cardoso explains that São Paulo is seeing an upward trend in asking prices, driven not only by the sheer size of its economy but also by a gradual demand for higher-quality space—a trend that is creating pressure beyond
Avenida Faria Lima, the city's financial hub.
Consequently, businesses are migrating to adjacent areas like Rebouças, as well as to more distant locations such as Chucri Zaidan
and Chácara Santo Antônio.
The executive states that while there is no lack of demand in Bogotá, there is no new inventory. The average vacancy rate in the Colombian capital ended the semester at the lowest level in the region, at 5.4%. Amid a strong dollar, prices in the city have risen significantly. According to Cardoso, new inventory is expected to come online between 2027 and 2029. Meanwhile, regarding Santiago, he highlights that the market is mature and well-planned, which contributes to predictability and the balancing of supply and demand.
Buenos Aires
The Cushman study indicates that the Argentine capital was the only market in the region to see falling prices during the first half of the year—a 1.3% decline compared to the same period last year. However, the consultancy notes a significant disparity among the city's submarkets. The Palermo (US$ 28/m²) and Libertador (US$ 27.7/m²) areas serve as the city's "premium corridors," while Centro Sur (US$ 14/m²) is the most affordable.
